The Central Bank of Uruguay just rolled out its own digitized version of their peso.
On November 3, Uruguay’s central bank, Banco Central del Uruguay (BCU) published details on the six-month pilot program that would test digital versions or “tickets” representing the Uruguayan peso—which CBU’s head reiterates “is not a cryptocurrency such as bitcoins” and will remain under BCU’s command.
The test requires involves 10,000 subscribers to the government’s telecommunications provider, Administración Nacional de Telecomunicaciones (ANTEL) and requires users to download an application to their phone. They can then create a digital wallet and cash in through Red Pagos, a payments and collection agency. This would enable users to transact with merchants as well as other users in exchanges, even when they have older phones: “the mechanism is available for both smartphones and non-smartphones,” BCU stated.
“The first issue of digital tickets consists of 20 million Uruguayan pesos, of which 7 million were already transferred to Red Pagos,” BCU added. BCU president Mario Bergara says this just a digitization of their existing fiat currency, and not a new one.
“This is not a new currency, it is the same Uruguayan peso that instead of having a physical support has a technological support,” Bergara said. “It is expensive to print tickets, the distribution in the whole territory, the security for the transport of the same, and also the opacity that the physical ticket promotes.”
Bergara adds that should the pilot run succeeds, a reasonably long adjustment time will be given to ease their citizen’s transition to the digital currency: “for the comfort of all citizens, the transition will take a long time.”
Despite the challenges posed by digitizing traditional fiat, Uruguay isn’t the only one exploring this trial. The UK, Sweden, Ecuador, Dubai, among others, are also dabbling with similar projects.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.